Quarterly Economic Bulletin 2016/17 Q2

Quarterly Economic Bulletin

2016/17 Q2

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Table of Contents

Table of figures .......................................................................................................... 3

Table of tables ............................................................................................................ 3

List of Abbreviations ................................................................................................... 4

Foreword .................................................................................................................... 5

1. Introduction ......................................................................................................... 5

2. South African Economy ....................................................................................... 8

2.1. National Perspective ..................................................................................... 8

2.2. Provincial perspective ................................................................................... 9

3. Agriculture ......................................................................................................... 10

4. Social Indicators ................................................................................................ 12

4.1. Population ................................................................................................... 12

4.2. Education .................................................................................................... 14

4.2.1. Sub postgraduate qualification ............................................................. 14

4.2.2. Post matric qualification ........................................................................ 15

4.3. Health .......................................................................................................... 16

4.3.1. Medical aid coverage ............................................................................... 16

4.3.2. Chronic health conditions ......................................................................... 17

4.3.3. Disability .................................................................................................. 18

4.4. Social welfare .............................................................................................. 19

5. Communication ................................................................................................. 21

6. Transport ........................................................................................................... 22

7. Conclusion ........................................................................................................ 24

8. Recommendations ............................................................................................ 24

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Table of figures

Figure 1 SA GDP, Constant 2010 prices, seasonally adjusted .................................. 8

Figure 2 Limpopo GDP, Constant 2010 prices, seasonally adjusted ......................... 9

Figure 3 Main reason for agricultural involvement in Limpopo province, 2015 ......... 10

Figure 4 Population by province, 2015 ..................................................................... 12

Figure 5 Limpopo population by sex, 2015 ............................................................... 13

Figure 6 Population aged 20 years and older with sub postgraduate qualification,

2015 ......................................................................................................................... 14

Figure 7 Population aged 20 years and older with post matric qualification, 2015 ... 15

Figure 8 Medical aid coverage, by population group, 2015 ...................................... 16

Figure 9 Population suffering from chronic health conditions as diagnosed by a

medical practitioner or nurse, by sex and province, 2015 ........................................ 18

Figure 10 Population aged 5 years and older that have some difficulty or are unable

to do basic activities, by province, 2015 ................................................................... 19

Figure 11 Population that received social grants, relief assistance or social relief,

province, 2015 .......................................................................................................... 20

Figure 12 Limpopo population that received social grants, relief assistance or social

relief, by sex, 2015 ................................................................................................... 20

Figure 13 Households’ ownership of a cellular phone and Land line, by province,

2015 ......................................................................................................................... 21

Figure 14 Low frequency trips by household members per week using each of the

following modes of transport (0 -10 Trips), 2015 ...................................................... 22

Figure 15 High frequency trips by household members per week using each of the

following modes of transport (11 - 41+ Trips), 2015 ................................................. 23

Table of tables

Table 1 The number of livestock the household has per province, 2015 ................. 11

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List of Abbreviations

AIDS- Acquired Immune Deficiency Syndrome

BRT-Bus Rapid Transport System

EAT - Estimated Arrival Time

FDI-Foreign Direct Investments

GDP- Gross Domestic Product

GHS - General Household Survey

HIV- Human Immunodeficiency Virus

ICT- Information and Communication Technology

LDP-Limpopo Development Plan

MDGs- Millennium Development Goals

MTBPS- Medium Term Budget Policy Statement

NDP- National Development Plan

NHI- National Health Insurance

OECD -Organisation for Economic Co-operation and Development

RDP- Reconstruction and Development Programme

RSA-Republic of South Africa

SA- South Africa

SDG -Sustainable Development Goal

SDGs -Sustainable Development Goals

SERO -Socio-Economic Review and Overview

SEZ’s -Special Economic Zones

SOEs -state owned enterprises

UN-United Nations

WHO-World Health Organisation

StatsSA-Statistics South Africa

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Foreword

About 170 countries, South Africa included, agreed to extend the successes of the

Millennium Development Goals (MDG’s) to the new Sustainable Development Goals

(SDG’s), of which there is a seamless coherence between the SDGs and the National

and Limpopo provincial development plans. The Limpopo Development Plan (LDP)

aspire to tackle the triple challenges of poverty, unemployment and income inequality

through inclusive economic growth which are embodied in the new SDGs.

Human development levels have generally improved over the years as projected in

the General Household Survey (GHS) 2015 produced by Statistics South Africa

(StatsSA). Crucial evidence in the survey is the education levels in the province,

challenges faced by the health sector to household infrastructure. This second

Quarterly Economic Bulletin (QEB) premises its analysis on the insightful survey to

understand the development needs of the province.

The national and provincial expenditure on development priorities are highly reliant on

government’s capacity to raise sufficient revenue, of which economic growth rate is an

important precursor of revenue generation. Economic performance, measured by real

GDP growth rate, grew by 3.3 percent in the 2nd quarter of 2016 reducing the risk of

suboptimal revenue collection.

As the province is preparing for the Medium Term Budget Policy Statement (MTBPS),

it is imperative that the fiscal policy support accelerated quantum industrialisation,

particularly in the identified Special Economic Zones (SEZ’s) and infrastructure

development to support market linkages and attract Foreign Direct Investments (FDI).

Integrated planning and coordinated implementation of development programmes will

assist the province to attain much with the limited resources it has in its disposal.

Signature

PRATT G. CA (SA) HEAD OF DEPARTMENT LIMPOPO TREASURY

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Introduction

South Africa has marginally escaped falling into a technical recession, with the GDP

data for the second quarter of 2016 showing growth rate of 3.3 percent. This follows a

difficult first quarter performance, where the economy declined by 1.2 percent. This

marks the fastest pace of growth for South Africa since 2014. Manufacturing, mining

and quarrying made the biggest contribution to GDP growth.

South Africa’s population stood at an estimated 55.9-million mid-year, while Limpopo

was at 5.6 million in the same period. The gender variance between males and

females is not very significant especially among the youthful population, although the

gap seem to widen among the elderly population. Due to unfavourable socio-economic

conditions such as low labour absorption rate, increase in discouraged labour force,

low economic growth rate and persistent draught, which has led to the general public

relying heavily on government services. The demand for public goods and services is

rising while resources to provide such services is limited.

About 70 percent of the white population in the province have medical aid, followed by

coloureds and Indians with 45.5 percent and 44.7 percent respectively. At the same

time, only 7.2 percent of the black African population have medical aid coverage while

an overwhelming 92.2 percent does not have medical aid. The National Health

Insurance (NHI) appears to be a convenient solution for the poor as the programme is

envisaged to provide access to quality, affordable personal health services for all

South Africans based on their health needs, irrespective of their socio-economic

status. This must be done by finding sustainable funding models that won’t risk

increasing government debt.

Around 49 percent, which is almost a half of the population of people aged 20 years

and older, possess between grades 10 – 12 qualifications. While the majority of post

graduate possess Diploma with Grade 12 and Certificate with Grade 12 representing

a combined 5.2 percent of the total adults over 20 years of age. The policy question is

whether the education system is responsive to the skills needs that are unique to each

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regional economy. If this was so, the province and the country wouldn’t be suffering

from structural unemployment.

Furthermore, government is maintaining and gradually increasing the social welfare

net in terms of social grants. About 13 percent of the recipients of social grants are in

Limpopo while the largest population is in KwaZulu Natal accounting for 24 percent.

There is a need for the South African government to find sustainable sources of

revenue to fund the social welfare of the country. Over and above sustainable

financing, government needs to deal with economic and socio-economic factors such

as economic growth and employment levels that can increase or reduce over reliance

on social grants.

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1. South African Economy

1.1. National Perspective

South Africa’s gross domestic product (GDP) grew by 3.3 percent quarter-on-quarter

in the second quarter of 2016, after contracting by 1.2 percent in the previous quarter

of 2016. The year-on-year growth rate was 0.6 percent. The primary sector showed a

growth rate of 8.8 percent. Meanwhile the secondary sector grew by 5.3 percent and

the tertiary sectors showed a growth rate of 2 percent. Much of the growth in the

second quarter was driven by Mining and Manufacturing sectors.

Figure 1 SA GDP, Constant 2010 prices, seasonally adjusted

Source: StatsSA- Gross Domestic Product

The International Monetary Fund (IMF) expects South Africa’s gross domestic product

(GDP) growth to remain flat at 0.1 percent in 2016, noting that the economy will only

experience a modest recovery in 2017. It warned that unless a comprehensive

structural reform package, which fosters greater product market competition, more

inclusive labour market policies and industrial relations, and improved education and

training, as well as reducing infrastructure gaps, was tackled, the country would not

experience growth.

3.3

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Mar

-12

May

-12

Jul-

12

Sep

-12

No

v-1

2

Jan

-13

Mar

-13

May

-13

Jul-

13

Sep

-13

No

v-1

3

Jan

-14

Mar

-14

May

-14

Jul-

14

Sep

-14

No

v-1

4

Jan

-15

Mar

-15

May

-15

Jul-

15

Sep

-15

No

v-1

5

Jan

-16

Mar

-16

May

-16

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For the country to evade the credit degrading, it has to maintain positive economic

growth over the medium term and to ensure fiscal sustainability. It should avoid

popular social expenditure that might risk widening national budget deficit and to

ensure financial stability of state owned entities. Finally, the independence of crucial

institutions in the country such as the judiciary, public protector and the South African

Reserve Bank among others needs to be maintained.

1.2. Provincial perspective

According to IHS Regional Explorer, provincial economic growth was recorded at 2

percent in 2015. Although the StatsSA doesn’t provide the GDP data at regional level

for the current quarter, it is estimated that the provincial economy is performing

moderately in a positive territory due to the improved commodity prices and increased

mineral resources exports. The local economy is driven secondly by the community

services of which its contribution in the local economy has been consistent over the

years which it is also expected to support the positive economic growth of the local

economy.

Figure 2 Limpopo GDP, Constant 2010 prices, seasonally adjusted

Source: (IHS) Regional Explorer

-1.6%

2.5%

0.9%

2.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

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However, the drought in the country has not only caused water shortages but an

increase in interest rates and also a depreciating exchange rate. Maize and soybean

production will also be affected due to late summer rains. There will be a high amount

of maize being imported, GrainSA estimating about 4 million tonnes to be imported in

2016, which will hike up prices due to the rand weakening against major trading

countries’ currencies.

2. Agriculture

Agriculture in the province has a central role to play in building a strong economy and,

in the process, reducing inequalities by increasing incomes and employment

opportunities for the poor. The majority of subsistence farmers in the province are

black Africans located in semi- rural and rural areas. Most still utilise traditional farming

methods with heavy reliance on rain as the main source of irrigation. The El Niño

phenomenon has adversely affected sustainable subsistence farming particularly for

households who make farming as their main source of food. The drought therefore

risks food security in the province and compromises the development of small scale

farmers; upsurge in bankruptcy cases which forced many off their newly redistributed

farmland.

Figure 3 Main reason for agricultural involvement in Limpopo province, 2015

Source: StatsSA - General Household Survey (GHS)

93.2

0.9 1.5 3.1 1.2

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Extra source of food Main source of foodfor the household

Leisure activity Extra source ofincome

Main source ofincome

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Figure 3 shows the main reasons for agricultural involvement in the province by the

farmers. In Limpopo 93.2 percent of households engage in agricultural activities to

supplement their source of food. Meanwhile 3.1 percent engage in agriculture to

supplement their income and about 1.5 percent are practising agriculture for the

leisure. Furthermore, 1.2 percent are engaged in agriculture as the main source of

income and 0.9 percent are doing it as a main source of food for their households.

Table 1 The number of livestock the household has per province, 2015


As illustrated in Table 1, Limpopo has a total of 185 thousand households that are

practising livestock farming. Out of that 73 thousand are involved in cattle farming,

about 100 thousand engaged in goat and sheep farming, while 13 thousand are in pig

farming. There is low variation between the number of households in Limpopo

participating in livestock farming as compared to those in Mpumalanga and North West

sitting at 185, 98, and 130 thousand households. While the largest number of

households are in Eastern Cape and KwaZulu Natal recording 587 and 405 thousand

households.

Western

Cape

Eastern

Cape

Northern

CapeFree State

KwaZulu-

Natal

North

WestGauteng

Mpumalan

gaLimpopo

South

Africa

0-10 0 125 4 7 124 31 0 35 57 381

11-100 2 41 2 4 57 20 0 15 15 156

100+ 1 2 1 1 1 4 1 1 1 13

Total 3 168 7 12 182 55 1 51 73 550

0-10 0 46 3 1 23 9 1 5 8 97

11-100 1 71 2 3 6 12 0 2 5 102

100+ 4 6 4 5 1 2 0 2 0 22

Total 5 123 9 9 30 23 1 9 13 221

0-10 0 86 7 1 122 24 1 24 70 335

11-100 0 79 4 1 45 24 0 7 16 175

100+ 0 * 1 2 1 * 0 0 0 4

Total 0 165 12 4 168 48 1 31 86 514

0-10 0 127 1 3 21 4 0 6 12 173

11-100 0 4 0 0 3 0 0 1 1 9

100+ 1 0 0 1 1 0 0 0 0 4

Total 1 131 1 4 25 4 0 7 13 186

Total 9 587 29 29 405 130 3 98 185 1 471

Pigs

Sheep

Goat

Number of livestock

Thousand

Cattle

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It is evident that subsistence farming plays an important role in the rural parts of the

province as a source of food and income. In some instances, it can contribute to

employment for the low skilled or non-educated citizens.

3. Social Indicators

3.1. Population

Policy planners understand that development strategies depend on sustained

investments in health care, education, employment, and natural resources. However,

rapid population growth in many developing countries threatens to undermine these

investments and exacerbate the challenges of poverty, maternal and child health,

HIV/AIDS, gender discrimination, and job creation. It also puts pressure on agricultural

land, fresh water, and energy resources.

According to StatsSa in their mid-term estimates, the South Africa population is

currently sitting at 55.9 million people. Limpopo has the fifth largest population number

in the country at 5.6 million representing 10 percent of the national population.

Limpopo is preceded by Gauteng, KwaZulu-Natal, Eastern Cape and Western Cape

with population numbers sitting at 13.2 million, 10.7 million, 6.7 million and 6.2 million

respectively. The lowest populated region is Northern Cape at 1.2 million people.

Figure 4 Population by province, 2015


1 182

2 763

3 703

4 236

5 654

6 246

6 693

10 688

13 268

0 2 000 4 000 6 000 8 000 10 000 12 000 14 000

Northern Cape

Free State

North West

Mpumalanga

Limpopo

Western Cape

Eastern Cape

KwaZulu-Natal

Gauteng

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The growth in the population in the province has both positive and negative

implications in the province. When analysing the socio-economic conditions of the

province, the population growth is straining the provincial fiscus. Unfavourable socio-

economic conditions such as low labour absorption rate, increase in discouraged

labour force, low economic growth rate and persistence of draught, has led to the

general public relying heavily on government services. The demand for public goods

and services is rising while resources to provide such services is limited. There is a

need to convert the adversities of population growth to opportunities of development.

According to figure 5, there are more females in the province who make up 52 percent

of the total population as compared to males who make up only 48 percent. This

invariably raises policy questions of whether government services are gender inclusive

as the needs of both sexes vary.

Figure 5 Limpopo population by sex, 2015


2 701, 48%

2 953, 52%

Male Female

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3.2. Education

3.2.1. Sub postgraduate qualification

On the one hand, education which is SDG 4 is seen as a product of the development

process that is worthy of pursuit by itself. On the other hand, education is considered

a crucial input into the development process. It is considered an input to economic

growth, health outcomes, institutional development, and possibly trade, among others.

As indicated on Figure 6, around 46 percent, which is almost a half of the population

of people aged 20 years and older, possess between grades 10 – 12. This raises

policy questions of whether the provincial and national economy ready to

accommodate the growing number of high school learners throughput in the existing

higher learning institutions. Given limited learner absorption rate in higher learning

institutions, most of the youth will seek to find alternative occupation in the labour

market, raising socio-economic challenges such as unemployment, rise in criminal

activity and depression. About 10 percent, representing 312 thousand of the adults

above 20 years of age who do not have any form of education level.

Figure 6 Population aged 20 years and older with sub postgraduate qualification, 2015


10%

0% 1% 1% 2% 2% 2%4%

5% 6%

9%

13% 13%

20%

0%

5%

10%

15%

20%

25%

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3.2.2. Post matric qualification

Figure 7 Population aged 20 years and older with post matric qualification, 2015


The majority of post graduate possess Diploma with Grade 12 and Certificate with

Grade 12 representing a combined 5.2 percent of the total adults over 20 years of age.

Nevertheless, this is the largest post matric qualifications in the province. Bachelor’s

Degree, Honours Degree and Higher degree (Masters, Doctorate) only make up 1.5

percent, 0.9 percent and 0.2 percent respectively.

The above analyses requires the province to assess and align post matric certificates

and diplomas to meet the skill demand in the various economic sectors in the province.

According to the Limpopo Socio-Economic Review and Overview (SERO) 2015/16 the

province has comparative advantage in agriculture, mining, electricity, and trade,

excluding the community services. These are the sectors that the education system

could feed in relevant skills and eliminate structural unemployment; graduates

possessing irrelevant qualifications for the local economic and industrial needs.

0.4% 0.3%0.6%

0.4%0.3% 0.3%

0.5%0.2%

1.6%

3.6%

0.5%

0.1%

1.5%

0.2%

0.9%

0.2%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

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3.3. Health

3.3.1. Medical aid coverage

Medical services in the country are provided by both private and public sector. There

is an overwhelming perception that private sector medical services are more efficient

and satisfactory as compared to public health care. However, the private sector

medical services are normally accessed by the middle-class through medical aid

coverage. This generally excludes the majority of the low income and poor population

of the province to rely on public sector health care services. There is no doubt that

poverty is a contributing factor to poor health outcomes. Poor people have lower life

expectancies, higher prevalence of chronic illnesses and health conditions, and they

have more unmet health needs than people in the middle-class and high income

levels.

Figure 8 Medical aid coverage, by population group, 2015


Based on Figure 8 about 70 percent of the white population in the province have

medical aid, followed by coloureds and Indians with 45.5 percent and 44.7 percent

respectively. Only 7.2 percent of the black African population have medical aid

coverage while an overwhelming 92.2 percent does not have medical aid. Followed

by the Indian/Asian population at 55.3 percent and Coloured population at 54.4

7.2%

45.5% 44.7%

70.3%

92.2%

54.5% 55.3%

29.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Black African Coloured Indian/Asian White

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percent. The least population without medical aid is the white population at 29.7

percent.

Private health insurance started to grow rapidly, the primary approach to helping poor

people obtain medical care has been to make public health insurance available to a

growing share of the poor. Underlying this approach is the assumption that if poor

people have health insurance, physicians and other providers of medical care will

provide the same services to poor people as they do to middle-class people. The idea

of rolling out of the National Health Insurance (NHI) was to provide access to quality,

affordable personal health services for all South Africans based on their health needs,

irrespective of their socio-economic status. NHI is intended to ensure that the use of

health services does not result in financial hardships for individuals and their families.

Nevertheless, the health care assistance for the poor is being administered more as a

welfare program than as part of a national system of financing health insurance and

medical care.

3.3.2. Chronic health conditions

According to the World Health Organisation (WHO) poverty is also caused by chronic

diseases. Once again, it is people and families who are already poor who are most

likely to suffer, because chronic diseases are likely to ruin a family’s economic

prospects. Wealth enables people to avoid most of the risks of developing chronic

disease, and to obtain access to health care. However, even within high income

countries, psychosocial factors, for example lack of social support and perceived lack

of control, are strongly related to the risk of chronic diseases.

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Figure 9 Population suffering from chronic health conditions as diagnosed by a

medical practitioner or nurse, by sex and province, 2015


According to Figure 9 about 227 thousand people in the province are suffering from

Hypertension/high blood pressure. Followed by HIV and AIDS and Diabetes affecting

92 thousand people and 75 thousand people. The least prevalent chronic health

conditions are Pneumonia affecting 6 thousand people, Bronchitis affecting 6

thousand people, as well as Meningitis and Sinusitis affecting 5 thousand people.

3.3.3. Disability

There is a high number of people in the province which are unable to care for

themselves, constituting 244 thousand. This number may be relatively small as a

proportion of the total population but the burden may be sever for poor and low income

households with lack of access to appropriate health services. The second highest

disability in the province is seeing affecting about 183 thousand people, thirdly

followed by disability of walking affecting 140 thousand people.

227

92

75

51

38

34

23

20

12

9

8

6

6

5

0 50 100 150 200 250

Hypertension/high blood pressure

HIV and AIDS

Diabetes

Asthma

Mental Illness

Arthritis

Epilepsy

Tuberculosis

Stroke

Cancer

Heart attack / Myocardial infarction

Pneumonia

Bronchitis

Meningitis and Sinusitis

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Figure 10 Population aged 5 years and older that have some difficulty or are unable

to do basic activities, by province, 2015


To enable persons with disabilities attain and maintain maximum independence,

capacity development efforts should be aimed at ensuring access to employment. This

can be done by promoting access to inclusive education, skill development and

vocational and entrepreneurial training

3.4. Social welfare

Social welfare policies are important because they form the framework that allows all

citizens to live within their basic rights with access to some of the most basic social

amenities. These programs developed and guided by the underlying policies are

geared towards helping people in need for purposes of poverty alleviation. They also

offer an opportunity to risk groups to maintain their households and preserve their

human dignity.

Limpopo is the fourth largest beneficiary of social grants in the country representing

13 percent. It is surpassed by KwaZulu Natal, Eastern Cape and Gauteng recording

24, 16 and 14 percent respectively. Generally, the number of beneficiaries is driven by

both demographic and socio-economic factors such as population size and age,

unemployment and economic activity.

0

50

100

150

200

250Seeing

Hearing

WalkingRemembering and

concentrating

Self-care

20 | P a g e

Figure 11 Population that received social grants, relief assistance or social relief,

province, 2015


The majority of the social grant recipients in the province are females who account for

54 percent. Rightly so, because firstly they have longer life expectancy than men

making the senior female population more than that of males. Secondly, there are

more men in employment than females after the age of 60 years. Men who receive

social grant only account for 46 percent.

Figure 12 Limpopo population that received social grants, relief assistance or social

relief, by sex, 2015


8%

16%

3%5%

24%

7%

14%

9%

13%

0%

5%

10%

15%

20%

25%

30%

982, 46%

1 164, 54%

Male Female

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4. Communication

Africa has witnessed a fast penetration of telephone technologies and increased

access to ICT services in the last ten years. A study done by the United Nations (UN)

proved that in 2010, global coverage of land lines was only 2 percent, compared to a

global level of 80 percent for mobile coverage. Access to fixed phone lines in Africa

remains very low at less than 0.2 percent.

In the province about 97 percent of households own a cellular phone as compared to

the 3 percent of households in ownership of landline phones. Due to rapid

technological advancements the expansion of cellular ownership has accelerated

significantly and has improved the lives of ordinary citizens in the country. This is an

important indication to corporate and government into understand the evolving

communication channels, and guide product innovation.

Figure 13 Households’ ownership of a cellular phone and Land line, by province, 2015


Information technologies are reducing transaction costs and making loans less costly

in rural areas, for example, using agricultural credit cards to purchase inputs or cellular

phones to complete banking transactions. Government can use the connectivity of the

majority of population in the province to advance service delivery and rural

1 484, 97%

42, 3%

Households’ ownership of a cellular phone, by province, 2015

Households’ ownership of a landline phone, by province, 2015

22 | P a g e

development through tele-oriented solutions. African countries such as Ghana are

advancing in providing agrarian support to small scale farmers through cellular

phones.

5. Transport

Transport is an indispensable element of development and socio-economic growth.

As engines of economic integration, transport infrastructure and service facilities

constitute a precondition for facilitating trade and the movement of goods and persons.

The National Development Plan (NDP) 2030 states that by 2030, passenger transport

should be user-friendly, less environmentally damaging, more affordable and

integrated or seamless. This aspiration is however hampered by the fragmented

nature of institutional governance in passenger transport.

Figure 14 depicts the low frequency trips taken by household members per week using

either train, taxi or bus. For low frequent trips consumers prefer using trains and buses

amounting to 1.532 million trips and 1.523 million trips per week. Trains and Buses

would be preferred for long distances and for their cost effectiveness.

Figure 14 Low frequency trips by household members per week using each of the

following modes of transport (0 -10 Trips), 2015


On the other side, for high frequent trips, that is from 11 to 41 per week, passengers

prefer using taxis mainly for the efficiency, flexibility of terminus and reduced estimated

1 532

1 474

1 523

1 440

1 450

1 460

1 470

1 480

1 490

1 500

1 510

1 520

1 530

1 540

Train Taxi Bus

23 | P a g e

arrival time (EIT). The taxis make 53 thousand trips per week as compared to trains

and busses which are only making 1 thousand and 9 thousand trips per week

respectively.

Figure 15 High frequency trips by household members per week using each of the

following modes of transport (11 - 41+ Trips), 2015


The passenger transport system is not effectively integrated across all modes, nor at

different trip interchange segments. The ineffectiveness includes a lack of co-

ordination of services scheduled, facilities and infrastructure along strategic priority

corridors, and the fragmentation of regulatory authority in the sector. Implementation

of inter-modal transfers, fare structure, integration of and integrated ticketing systems

are generally not possible under the current passenger transport system. Some

progress has been made towards solving this issue where Bus Rapid Transport

System (BRT) systems have been implemented. Modal options are limited, particularly

among the low income households, and this results in the poorest of the poor often

having no choice other than to use the most expensive form of passenger transport.

Accessibility to passenger transport services is also a major challenge, particularly in

the rural areas. A large proportion of scholars and workers have no alternative in rural

areas other than to walk to their destinations. One of the key reasons for this is due to

passenger transport services being planned according to demand responsive

principles.

1

53

9

0

10

20

30

40

50

60

Train Taxi Bus

24 | P a g e

6. Conclusion

The general living conditions of the citizens in the province have improved,

notwithstanding the outliers where government needs to accelerate the provision of

basic services and correcting market failures in terms of inadequate private sector

participation particularly in rural areas. The back to basics philosophy is aimed at

realigning municipalities in increasing their efficiency and effectiveness in executing

their core mandate. However, for the province to achieve optimal development of all

citizens, the province needs to achieve accelerated economic growth that is labour

absorbing thereby growing the tax base that will support and finance developmental

priorities in the province.

7. Recommendations

The average lacklustre economic growth in the country requires comprehensive

structural reform package, which fosters greater product market competition, more

inclusive labour market policies and industrial relations, and improved education and

training, as well as reducing infrastructure gaps. On the other hand, subnational

governments can support accelerated economic growth by rigorously implementing

practical and impactful economic growth and development action plans. This growth

can be achieved by analysing and taking advantage of various sector and product

competiveness and location advantage. The province has the potential of becoming

the industrial and logistical hub of African markets. The provincial fiscal policy will have

to be deliberate in advancing and supporting economic infrastructure development and

economic sector development in the province.

The drought condition requires robust government intervention to cushion food

security crisis and protect smallholder farmers to remain productive. Develop a

comprehensive agrarian support package for smallholder famers in the province. The

package should include both financial and non-financial agrarian support aimed at

sustaining and developing smallholder farmers. Non-financial support should

emphasis on the use of new and efficient farming methods that yield high productivity

yet being cost effective. Encourage cooperative farming which rationalises farming

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costs and resource sharing thereby reducing risk exposure that could have been borne

by a sole trader. Diversification is a high priority because it helps protect smallholders

from economic risks, such as market collapses, and helps prevent land degradation.

The land ownership and tenure status need to be look at in the province. The idea

behind is that famers can be able to invest in long term infrastructure and technologies

if they have certainty about the ownership of the land. The reality is that it is difficult to

invest in land that you are not sure of its future given the recent activities of illegal land

grabs and changing of the previously agricultural land to residential lands.

Population management is critical, while failure to do so may lead to social adversities.

Among other things, the provincial administration needs to stimulate labour absorbing

economic growth that will raise the general income levels of households to redeem

them out of poverty and capacitating them to be self-sustainable and not depend on

state services for sustenance. Raise literacy levels, particularly in rural areas. A literate

community is likely to take well informed decisions and become progressive

entrepreneurs thereby integrated to the mainstream economy. Promote family

planning can contribute directly or indirectly to achieving nearly all of the Sustainable

Development Goals (SDGs), by reducing household poverty, improving the health of

mothers and children, reducing the transmission of HIV/AIDS, and giving women more

opportunities to contribute fully to development. Leaders of many nations have

endorsed the MDGs.

To address the skills deficit in the country and oversupply of less demanded

qualifications, the national government needs to assess and align post matric

certificates and diplomas with the objective of synthesising skills supply and demand

in the various economic sectors in the provinces. According to the Limpopo Socio-

economic Review and Overview (SERO) 2015/16 the province has comparative

advantage in agriculture, mining, electricity, and trade, excluding the community

services. These are the sectors that the education system could feed in relevant skills

and eliminate structural unemployment; graduates possessing irrelevant qualifications

for the local economic and industrial needs.

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Government needs to embark on growing international studies programme by sending

young South Africans to international university for scarce trades that can stimulate

innovation and productivity in the local economy.

While access to medical care is essential, a wide proportion of the province

Government needs to accelerate the rolling out of NHI to increase access to quality,

affordable personal health services for all South Africans based on their health needs,

irrespective of their socioeconomic status. NHI is intended to ensure that the use of

health services does not result in financial hardships for individuals and their families.

However, the health care assistance for the poor is being administered more as a

welfare program than as part of a national system of financing health insurance and

medical care. This therefore demands increased fiscal capacity to cover the uninsured

poor population requiring a raise in national revenue instruments such as taxes.

To enable persons with disabilities to attain and maintain maximum independence,

capacity development efforts should be aimed at ensuring access to employment. This

can be done by promoting access to inclusive education, skill development and

vocational and entrepreneurial training. As an integral part of building a moderately

prosperous society, government should strive to narrow the huge gap in per capita

household income between urban and rural disabled people, and provincial gap with

the national average.

There is a need for the South African government to find sustainable sources of

revenue to fund the social welfare of the country. Financing these benefits depends

on economic and socio-economic factors such as economic growth and employment

levels. The current financial requirements of social security in the province and country

as a whole is influenced by the extension of social rights, and the growth of needy

population.

Information technologies are reducing transaction costs and making loans less costly

in rural areas, for example, using agricultural credit cards to purchase inputs or cellular

phones to complete banking transactions. Government can use the connectivity of the

majority of population in the province to advance service delivery and rural

development through tele-oriented solutions. African countries such as Ghana are

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advancing in providing agrarian support to small scale farmers through cellular

phones. Municipalities can take advantage of these growing connectivity or coverage

to reach out to its constituencies in terms of service delivery.

Accessibility to passenger transport services is also a major challenge, particularly in

the rural areas. A large proportion of scholars and workers have no alternative in rural

areas other than to walk to their destinations. One of the key reasons for this is due to

passenger transport services being planned according to demand responsive

principles. A shift in transport ideology is required to accelerate the integration of rural

economies to that of urban economies.

Quarterly Economic Bulletin 2016/17 Q2

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Transcript of Quarterly Economic Bulletin 2016/17 Q2